Get to the bottom of SEC mess

We hear all the time that our economy is over-regulated, that government is too involved in our commerce. And then we get bombarded with economic disasters - the subprime mortage meltdown, the Deepwater Horizon spill - in which government watchdogs turned out to be lapdogs.

We can at least hold out some hope for Acadiana people who were allegedly bilkied out of tens of millions as part of what is believed to have been one of the largest investment scams in American history. Arrested, awaiting trial and insisting he's innocent is the man said to be the mastermind, Allen Stanford.

The most recent target of federal investigation and civil litigation is Spencer Barasch, head of the Securities and Exchange Commission enforcement office until 2005. He's accused of failing to heed warnings about the growing scam even while seeking to represent Stanford.

Nine Acadiana people who were scam victims are suiing Barasch and the SEC. The FBI is investigating, too.

Regardless of what happens with Barasch and Stanford, Congress should move to keep the SEC and its staff at arm's length - a good, long arm's length - away from the people and firms it regulates.

The revolving door is spinning ridiculously fast at the agency. Reuters says a report by the Project on Government Oversight, a watchdog group, found that 219 SEC staff members have left the agency since 2006 to represent someone with business before the SEC.

If you think nothing's wrong with that, consider that Barasch is accused of ignoring warnings generated elsewhere in the SEC. And consider the losses relayed in lawsuit filings by local people: Robert Juan Dartez LLC ($638,000), David B. Sturlese ($696,000), Cynthia R. Dore ($3.09 million), Randolph J. Hebert ($7.2 million), all of Lafayette; Robert Hollier ($4.8 million) and Hollam Pinnacle Group LLC ($571,000) of Opelousas; and Michael R. Robicheaux and Cheryl T. Robicheaux ($1.6 million) and Brittany Robicheaux ($52,000) of Breaux Bridge.

Their lawsuit, filed in March in U.S. District Court in Texas, alleges that Barasch was able to head off probes of Stanford from 1998 to 2005. Meanwhile, what investigators are calling Stanford's scheme was taking $7 billion from Stanford's unsuspecting customers across the country as well as in Acadiana.

Congress should impose a mandatory waiting period between the time SEC staff members leave the agency and the time they get hired by any entity with business before the commission. The brazen nature of the allegations against Barasch argue for stronger criminal penalties for those found to have peddled influence. Those small steps would at least begin to focus the SEC's staff on regulatory duties rather than on on auditioning for new jobs.

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Get to the bottom of SEC mess

We hear all the time that our economy is over-regulated, that government is too involved in our commerce. And then we get bombarded with economic disasters - the subprime mortage meltdown, the